Correlation Between Sewoon Medical and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Sewoon Medical and Daewon Media at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sewoon Medical and Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sewoon Medical Co and Daewon Media Co, you can compare the effects of market volatilities on Sewoon Medical and Daewon Media and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sewoon Medical with a short position of Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sewoon Medical and Daewon Media.
Diversification Opportunities for Sewoon Medical and Daewon Media
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sewoon and Daewon is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sewoon Medical Co and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media and Sewoon Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sewoon Medical Co are associated (or correlated) with Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Sewoon Medical i.e., Sewoon Medical and Daewon Media go up and down completely randomly.
Pair Corralation between Sewoon Medical and Daewon Media
Assuming the 90 days trading horizon Sewoon Medical Co is expected to under-perform the Daewon Media. But the stock apears to be less risky and, when comparing its historical volatility, Sewoon Medical Co is 2.36 times less risky than Daewon Media. The stock trades about -0.16 of its potential returns per unit of risk. The Daewon Media Co is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 857,000 in Daewon Media Co on November 7, 2024 and sell it today you would earn a total of 18,000 from holding Daewon Media Co or generate 2.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sewoon Medical Co vs. Daewon Media Co
Performance |
| Timeline |
| Sewoon Medical |
| Daewon Media |
Sewoon Medical and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sewoon Medical and Daewon Media
The main advantage of trading using opposite Sewoon Medical and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sewoon Medical position performs unexpectedly, Daewon Media can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Daewon Media will offset losses from the drop in Daewon Media's long position.| Sewoon Medical vs. Amogreentech Co | Sewoon Medical vs. Hanjoo Light Metal | Sewoon Medical vs. PJ Metal Co | Sewoon Medical vs. Display Tech Co |
| Daewon Media vs. Keyang Electric Machinery | Daewon Media vs. Playgram Co | Daewon Media vs. Woorim Machinery Co | Daewon Media vs. Display Tech Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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